Ghana’s Currency Evolution: From Cowries to Cedis

Ghana’s currency has transitioned from British pounds to cedis and pesewas since its independence in 1957. The cedi, named after cowrie shells, replaced the colonial currency in 1965 and underwent redenomination in 2007. Debates persist on the effectiveness and value of the cedi post-redenomination, as the country strives to modernize its financial systems.

Ghana currently utilizes the cedi notes and coins as its official currency. This transition occurred on July 19, 1965, replacing the Ghana pounds, shillings, and pence following the country’s independence from British colonial rule. Before this shift, Ghana engaged with the West African Currency Board, which was in use primarily for trade purposes from the early 1940s until 1954.

In 1957, Ghana elected to depart from the British Colonial Monetary System, opting for a decimal system that was more widely recognized. The new cedi notes and pesewa coins issued at that time were initially valued at eight shillings and four pence. These new denominations bore the likeness of Ghana’s first president, Dr. Kwame Nkrumah, reflecting the country’s independence.

The name ‘cedi’ is derived from the Akan term ‘sedie,’ which refers to cowrie shells that served as a popular currency in the late 19th century. Meanwhile, ‘pesewa’ indicates the smallest denomination based on the historical gold-dust currency, effectively replacing the British colonial penny.

In 2022, Wonder Ami Hagan, the host of People & Places on GhanaWeb TV, toured the newly-refurbished Ghana National Museum, which features currency specimens from the colonial era to present day. According to a museum guide, Ghana’s currency has evolved through several phases, culminating in a redenomination on July 1, 2007, under the administration of John Agyekum Kufuor, who asserted that “the value will be the same.”

Debates regarding the effectiveness of the cedi redenomination persist, with some analysts arguing that this transition ultimately revealed a weakness of the local currency against the US Dollar. The redenomination resulted in the conversion of ten thousand cedis to one Ghana cedi, aimed at alleviating the complexities of maintaining accounting and statistical records, as well as addressing software-related issues.

The evolution of Ghana’s currency from pounds and shillings to cedis and pesewas reflects significant historical changes, particularly post-independence. The transition to the decimal system and subsequent redenominations signify Ghana’s attempt to modernize its financial system. Despite differing opinions on the impact of these changes, they have shaped the national economy and continue to influence Ghana’s monetary policy.

Original Source: www.ghanaweb.com